Most financial experts agree that having a plan for long term health care is a vital component of sound financial planning. After all, many people fear they will outlive their savings, and that an extended health care need could quickly drain a lifetime of preparation. But long term care insurance (LTC or LTCI*) is fairly new to most people, who may not yet understand the pros and cons. You may wonder how to choose a carrier and a plan, and how to find the confidence that you’re making a smart choice.
The answer is get information from an independent, unbiased expert. LTC Consumer is a resource to provide information about long term care planning and long term care insurance in an easy to understand, educational way. LTCI is not for everyone, but it’s close to essential for some. Here are some pros and cons, by various contributing factors, to help you decide what’s right for you.
PRO: If you don’t have the savings to pay for long term care, you should get coverage.
CON: If you’re comfortable that you’ll never need LTC or have enough money put aside already, save your money.
The current average LTCI claim is $200,000 to $250,000 and grows at 4% per year. Do you and your spouse or partner have at least this amount set aside for any needed care, separate from your retirement income?
PRO: Your age and health will let you plan ahead and get the right LTCI for your needs.
CON: It’s too late – you already have long term health care needs, don’t qualify for coverage, or will have to pay premiums that are prohibitively expensive.
Use our tool to get a free quote based on your specific situation.
PRO: Your current plans and coverage do not cover the LTC you may need. (Long term care is generally NOT covered by Medicare or Medicaid.)
CON: In your case, Medicare and Medicaid actually should cover most of what you may need.**
You should determine most-to-least likely scenarios for your future needs, then check your current plans to see what is and isn’t covered.
PRO: LTCI qualifies for tax advantages.
CON: You do not qualify for tax advantages.
Discuss this with your tax advisor or refer to LTC Consumer’s 2016 Tax Guide.
PRO: Most policies are flexible – coverage can change as your needs change.
CON: Premiums can change, too – you don’t want to commit to something now that may become something else later.
Yes, there is a range of options, and uncertainty is uncomfortable – but all insurance is about managing risk. Only you can decide what’s best for you.
PRO: You understand what LTCI is and how it works.
CON: It’s too confusing and daunting, and you don’t trust it yet. If this is the case, learn more, or better still, talk it over with an expert – free and with no obligation.
Once you understand the pros and cons of long term care insurance for your particular needs, you will be in a better position to start the process of choosing a carrier and a plan. LTC Consumer can help.
LTC Consumer is a new, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.
*We will use LTC to refer to the delivery of long term health care itself, and LTCI to refer to insurance plans designed to pay for that health care.
**Long term care is generally NOT covered by Medicare or Medicaid.